Ian Pearson: I am today revising the Debt Management Office's (DMO) 2008-09 financing remit to raise £37 billion to facilitate bank recapitalisation. The £37 billion will be raised through:
	£30.0 billion in additional gilt sales (taking total gilt sales to £110.0 billion in 2008-09); and
	£7.0 billion in additional Treasury bill sales, (taking the contribution to financing of Treasury bills in 2008-09 to + £6.1 billion and the planned Treasury bill stock at end-March 2009 to £23.7 billion).
	The planned increase in gilt sales will be split by maturity/type as follows:
	£21.0 billion of additional short-dated conventional gilts (taking total issuance to £46.0 billion) including the launch on 13 November 2008 of a new, current coupon, gilt maturing on 7 December 2011 (with a long first dividend period);
	£7.0 billion of additional medium-dated conventional gilts (taking total issuance to £19.8 billion);
	£1.0 billion of additional long-dated conventional gilts (taking total issuance to £25.2 billion); and
	£1.0 billion of additional index-linked gilts (taking total issuance to £19.0 billion).
	Seven additional gilt auctions will be scheduled, five of short-dated and two of medium-dated conventional gilts. The DMO has committed not to add any further gilt auctions in the third quarter of this financial year in the event of a further remit revision in the 2008-09 pre-Budget report.
	The maximum size of conventional gilt auctions will be increased from £4.0 billion to £5.0 billion (cash). The revised gilt auction calendar to the end of 2008 is shown below.
	The DMO also plans to supplement sales at auctions with a number of sales of gilts by mini-tenders, which are operations conducted directly with Gilt-Edged Market Makers by the DMO's dealing desk.
	The first such operation in this programme is being announced today to take place on Monday 20 October 2008, for £1.0 billion (nominal) of 4 per cent. Treasury Stock 2009, for settlement on Tuesday 21 October 2008.
	Other mini-tender operations are planned for 4&frac14;% Treasury Gilt 2055 in the week commencing 17 November, and for 1&frac14; Index-Linked Treasury Gilt 2055 in the weeks commencing 3 November and 1 December 2008.
	
		
			 Gilt Auctions to End-2008 (£nom) 
			  Currently Scheduled Additional 
			 Thu 16-Oct 4(1)/2% 2013 (£3.75bn)  
			 Tue 21-Oct  4&frac14;% 2011 (£4.75bn) 
			 Thu 23-Oct  5% 2018 (£3.0bn) 
			 Tue 28-Oct New IL 2032  
			 Thu 30-Oct  4% 2016 
			 Tue 04-Nov 4&frac34;% 2030  
			 Tue 11-Nov  4&frac34;% 2015 
			 Thu 13-Nov  New December 2011 
			 Thu 20-Nov 4(1)/2% 2019  
			 Tue 25-Nov 0&frac34;% IL 2047  
			 Thu 27-Nov  5% 2012 
			 Tue 02-Dec 4&frac14;% 2049  
			 Tue 09-Dec New IL 2032  
			 Thu 11-Dec 4(1)/2% 2013  
			 Thu 18-Dec  New December 2011 
		
	
	This revision to the DMO's remit does not take account of any other changes to the Government's forecasts of the public finances. These forecasts will be updated in the pre-Budget report. An updated remit, incorporating the changes announced today, will be published, as usual, after the Chancellor's statement.
	This revision to the DMO's financing remit is being made in accordance with paragraph 5.18 of the published remit which provides that:
	"Any aspect of this remit may be revised during the year, in light of exceptional circumstances and/or substantial changes in the following:
	the Government's forecast for the gilt sales requirement;
	the level and shape of the yield curve;
	market expectations of future interest and inflation rates; and market volatility".
	Under the terms of its Operational Notice, the DMO is not obliged to give more than one hour's notice of such an operation, but in this case, it is pre-committing to the week(s) in which the intended operations will take place, and also commits to give a minimum of 24 hours, notice of the actual size and timing of the planned tenders at the relevant time. Such decisions will be taken in the light of market feedback and conditions at the time.

Hazel Blears: A number of Icelandic banks went into administration in the middle of last week. It quickly became clear that many local authorities were among those who had deposits in those banks. The Government's first priority has been to do everything we can to help local authorities, along with other creditors, get back the money which they had deposited in the banks. In parallel, my Department has been working closely with the Local Government Association to ensure that individual authorities who are experiencing severe short-term difficulty get assistance to help them through this period. We are doing this to protect individuals, communities and the local services on whom the most vulnerable people in our society depend.
	We have put in place a five point plan:
	my right hon. Friend the Chancellor of the Exchequer froze the UK assets of Landsbanki last Wednesday, to ensure that local authorities and other creditors are treated fairly; and an HM Treasury delegation was sent to Iceland on Friday to discuss ways in which deposits could be protected;
	in relation to the banks in administration in the UK—Kaupthing Singer and Friedlander and Heritable—we are working to ensure that deposits are recovered as quickly as possible; and the Local Government Association has opened discussions with the administrators, Ernst and Young;
	the Local Government Association agreed with the Government last week that it would undertake an urgent analysis of the effects of the situation on individual local authorities, to provide a full picture of the impact on local government. As part of that exercise, which is nearing completion, the LGA have asked any local authority which is facing severe short-term difficulties to let them know as a matter of urgency. My right hon. Friend, the Minister for Local Government and my hon. Friend the Economic Secretary to the Treasury met the Local Government Association last Thursday; and we will be meeting again this week. My hon. Friend the Minister for policing met the Association of Police Authorities on the same day;
	we have established a joint rapid response unit with the LGA and Improvement and Development Agency - which is already operational—to provide sector-led support to authorities facing severe short-term difficulties. The Government and the LGA will agree an appropriate set of ways to assist authorities in that position; and have agreed that we will look at the issues facing each authority on a case-by-case basis; and
	the rapid response unit now has a team of experts in local authority financial management and treasury management in place, ready to go immediately into any authorities who need that assistance. Her Majesty's Inspectorate of Constabulary is similarly ready to provide support for police authorities.
	Our guidance to local government on investments makes clear that "the general policy objective is that local authorities should invest prudently the surplus funds held on behalf of their communities". It emphasises that "priority should be given to security and liquidity" and goes on to say that "it will be appropriate to seek the highest rate of return consistent with the proper levels of security and liquidity". This guidance appears to have been adhered to.
	Many authorities have already publicly stated that any risk is not a threat to frontline services—but a small number of authorities may have specific problems, which is why we have put in place support and expertise which is immediately available. No local authority has told the LGA that it is in such short-term difficulty that it cannot pay the wages of its staff.
	The Government and international partners have already acted to support stability of the banking system. The LGA and the Government encourage all councils to continue managing their finances prudently and sensibly in difficult times. My hon. Friend the Minister for policing met the Association of Police Authorities last week and my right hon. Friend the Home Secretary is keeping in close touch with the situation to ensure that the steps we are taking are applied as necessary to police authorities.
	We will continue to monitor the situation closely and to take appropriate action.
	This set of actions should be seen in the context of the wider action taken last week by my right hon. Friend, the Chancellor of the Exchequer. Acting on the advice of the Bank and FSA, my right hon. Friend the Chancellor of the Exchequer last week took action to protect the retail depositors banking subsidiary of Landsbanki and Kaupthing Singer and Friedlander, a UK-based banking subsidiary of Kaupthing Bank. Using powers under the Banking (Special Provisions) Act 2008, retail deposits in Heritable and Kaupthing, Singer and Friedlander have been transferred to ING Direct. Savers' money is safe and secure. The Chancellor has also guaranteed retail deposits in Icesave in full. The Treasury and the Financial Services Compensation Scheme are working with the Icelandic authorities and their Deposit Insurance Scheme to ensure that depositors in Icesave are paid back as quickly as possible. The Bank of England has also provided a short-term secured loan of up to £100 million to the London branch of Landsbanki, to help ensure an orderly wind-down and maximize the returns to UK creditors. The Government have also frozen the funds and financial assets held by Landsbanki. This is a precautionary measure to protect UK economic interests and we are continuing to work closely with the Icelandic authorities to ensure a fair process for UK creditors.

Liam Byrne: Over the last few days, the Cabinet Office has been working actively to determine the economic situation some charities may find themselves facing.
	Only a small fraction of a total of £56 billion(1) worth of investment assets held by general charities(2) is invested in Icelandic banks.
	As agreed at a meeting between Ministers and charity representatives on Friday 10 October, the Cabinet Office is working with ACEVO, NCVO, CFDG and CAF to ascertain the full extent of investment assets affected by the position of Icelandic banks.
	We are working closely with the Charity Commission, the sector's regulator, to support charities who have deposits in Icelandic banks. We are also discussing directly with affected charities their concerns.
	Acting on the advice of the Bank and the FSA, my right hon. Friend the Chancellor of the Exchequer last week took action to protect the retail depositors in three Icelandic banking operations in the UK: Icesave, a UK-based branch of Landsbanki; Heritable, a UK-based banking subsidiary of Landsbanki; and Kaupthing Singer and Friedlander, a UK-based banking subsidiary of Kaupthing Bank. Using powers under the Banking (Special Provisions) Act 2008, retail deposits in Heritable and Kaupthing, Singer and Friedlander have been transferred to ING Direct. Savers money is safe and secure. The Chancellor has also guaranteed retail deposits in Icesave in full. The Treasury and the Financial Services Compensation Scheme are working with the Icelandic authorities and their deposit insurance scheme to ensure that depositors in Icesave are paid back as quickly as possible.
	The Bank of England has also provided a short-term secured loan of up to £100 million to the London branch of Landsbanki, to help ensure an orderly wind-down and maximize the returns to UK creditors. The Government have also frozen the funds and financial assets held by Landsbanki. This is a precautionary measure to protect UK economic interests and we are continuing to work closely with the Icelandic authorities to ensure a fair process for UK creditors.
	We are working with HM Treasury to do what we can to support those organisations with investments in Icelandic banks, and ensure they are in the strongest possible position to protect their investments.
	In the light of recent global economic events, the Government are more determined than ever to support the third sector through the upcoming months and years. We are committed to ensuring that charities are supported in resolving any short term issues they may face as well as supporting them in the long term.
	We are working closely with sector leaders, representing small and large organisations, and Ministers will co-chair, alongside Stuart Etherington, an upcoming NCVO sector-wide summit to tackle upcoming issues.
	A survey released by the Commission this morning has revealed that one in four charities has already put in place measures to deal with the economic downturn. The Commission is keen to provide further advice and guidance for charities and trustees via its helpline and website.
	We are confident that the sector is in better shape than ever before to meet the challenges ahead. Its income from Government has doubled over the last 11 years to a total of £11 billion a year.
	I will continue to represent the interests of the sector at the newly founded National Economic Council, which will consider the impact of the current financial crisis on the economy as a whole.
	(1) General charities are defined as 'private non-profit-making bodies serving persons'. This excludes sacramental religious bodies or places of worship, UK Civil Society Almanac (2008)
	(2) UK Civil Society Almanac (2008)